Finance Leasing Manual - FLM33.19

Cumulative accountancy rental excess: deeming a period of account to end

Paragraph 12(5) Schedule 12 FA 1997 deems a period of account to end and a new one to begin immediately before the disposal for the purpose of giving relief under Paragraph 12 (see FLM33.17). A further effect of this is to make it clear that any cumulative accountancy rental excess brought forward at the beginning of that period may be set against an excess of normal rent over accountancy rental earnings arising in that period under Paragraph 6 Schedule 12 FA 1997, in priority to set-off against the capital gains disposal proceeds under Paragraph 12.